n this two-parter, I want to introduce
you to Bitcoin, a topic that fascinates
me almost as much as cryonics. Many
Cryonics readers will have already heard of
Bitcoin (certainly my first introductions
to it were by members of the cryonics
community), but in order to go on and talk
about cryonics-specific uses for Bitcoin
in the second part, I think it is important
to give the actual technology a proper
introduction, as well as a brief history
of its creation and development. But
perhaps most importantly, cryonicists have
had important involvement in Bitcoin’s
inception and spread, and through the
backward-looking lens of history, I
believe this is a connection the cryonics
community will be proud of. [At this point,
I think it’s important to make the following
disclaimer: I own bitcoins, and am very
optimistic about their future, both in value,
and their potential as a highly positive
disruption in the global financial system.]

What is Bitcoin?1
A “peer-to-peer electronic cash system” is
what Bitcoin’s creator, Satoshi Nakamoto
called his idea in its initial design paper.
The more wieldy name for Bitcoin and
the many, lesser-known “altcoins” that
have been developed in Bitcoin’s wake, is
cryptocurrency, the prefix crypto—referring
to the fundamental role cryptography
plays in its operation. Bitcoin is sometimes
called a “virtual currency,” and while this is
certainly an easier way of communicating
www.alcor.org

the general idea to the uninitiated, it does
ignore what differentiates Bitcoin from
other, equally “virtual” currencies in online
games, such as World of Warcraft “gold”
that has acquired real-world value (to the
game’s players, at least) and is traded for
regular currency. Online merchants such
as Amazon have also developed virtual
currencies specific to their brands, as
the next paradigm of prepaid gift cards
and loyalty rewards programs. But all
these other sorts of virtual currencies are
ultimately controlled by a single entity—
not unlike governments’ control over
their local currencies—whereas Bitcoin
operates by consensus over a distributed
peer-to-peer network. So bitcoins, World
of Warcraft gold, and Amazon Coins are
really apples, oranges, and bananas.
Others
reject
the
“currency”
characterization entirely, instead conceiving
of Bitcoin as a “digital commodity.” But
to me, that simply begs the question of
what features of the bitcoins themselves
has commodified them? If it is their
usefulness as a means of transferring
value, are they not a currency first, and a
commodity second? There is something
of a chicken-and-egg aspect to that debate,
so I will leave it to the economists and
philosophers. Personally, I think it is more
useful to define Bitcoin descriptively, in
which case Bitcoin is a globally distributed
ledger of transactions of a unit called “a
bitcoin.” A bitcoin has whatever value (in
other currencies, or goods) that those who
Cryonics / October 2013

concur in Bitcoin’s utility agree it has—
voting with their traditional currencies by
purchasing bitcoins with them. And so far,
the global market’s valuation of Bitcoin
has increased by at least six orders of
magnitude since it was released into the
world in early 2009.
Now, the distributed ledger which
forms the backbone of the Bitcoin
network actually has a name of its own—
the “blockchain”—so called because
transactions between addresses of the
network are recorded in the ledger in
sequential “blocks” of data one megabyte
in size. The transactions are collected into
these blocks, verified for validity, and added
to the blockchain by specialized users of the
network, who must first “solve” the block
by running it through a computationally
intensive process called “hashing” until a
particular result is reached, at which point
that block is added to the chain and that
user is rewarded with new bitcoins, along
with any of the (optional) transaction
fees included with the transactions in that
block.2 Because doing this work that keeps
the network functioning is incentivized
with the block reward, this whole process
is referred to as “mining” bitcoins. The
block reward halves approximately every
four years, and the number of bitcoins will
never exceed 21 million, though they can
be subdivided further by adding additional
decimal places as necessary.
Bitcoins
reside
at
bitcoin
addresses, which are rather unsexy
15